14 April 2023
By
Leigh
Collins
Wrongful acts' | Leading hydrogen electrolyser
maker Plug Power faces class-action lawsuit launched by five legal
firms
Case document states that investors ‘suffered
significant damages’ due to false and misleading statements by four of
the US company’s senior executives
A class-action lawsuit against US electrolyser
and fuel-cell manufacturer Plug Power has been filed in a Delaware
court, accusing the company of making false and misleading statements
and failing to disclose “material adverse facts” that subsequently
caused investors to suffer “significant damages”.
Investors who purchased shares in the company —
which is set to be the world’s largest electrolyser maker by
manufacturing capacity this year — during the so-called “class period”
(between 9 August 2022 and 1 March this year) are now being encouraged
to join the lawsuit by four legal firms, with a fifth being a
co-signatory to the case document.
The lawsuit, Melton v Plug Power Inc at al — a
“class action complaint for violations of the federal securities law”
— was filed in the United States District Court for the District of
Delaware on Wednesday.
According to the filed case document, the defendants — namely Plug
Power Inc, CEO Andy Marsh, chief financial officer Paul Middleton,
executive vice-president of global manufacturing David Mindnich and
chief accounting officer Martin Hull — had “assured investors [in the
company's Q2 2022 financial results on 9 August 2022] that the Company
had a ‘Strong Business Outlook’ and touted a $15 billion sales
funnel”.
The document states that Marsh stated that he did “not foresee supply
chain issues this year”, with the company projecting 2022 revenue of
$900-925m — “representing approximately 80% year-over-year growth”.
“Just a few months later, on October 14, 2022, investors began to
learn the truth about Plug’s prospects when the Company warned that
full-year revenue could be 5% to 10% lower than previously projected”
due to “timing and broader supply chain issues”.
On 25 January, the document adds, Plug said that year-on-year growth
would be just 45-50% at least partly because “manufacturing had a few
more issues than we hoped”, as well as “added... complexity to supply
chain”.
On 1 March, Plug revealed its Q4 2022 results,
which showed that “full-year revenue growth of just 40% on a
year-over-year basis”.
“This Complaint alleges that, throughout the Class Period, Defendants
made materially false and/or misleading statements, as well as failed
to disclose material adverse facts, about the Company’s business and
operations. Specifically, Defendants misrepresented and/or failed to
disclose that the Company was unable to effectively manage its supply
chain and product manufacturing, resulting in reduced revenues and
margins, increased inventory levels, and several large deals being
delayed until at least 2023, among other issues,” the lawsuit states.
“As a result of Defendants’ wrongful acts and omissions, and the
significant decline in the market value of the Company’s common stock
when the truth was revealed, Plaintiff and other members of the Class
have suffered significant damages.”
The document, which “demands a trial by jury” is signed by two law
firms Delaware-based Deleeuw Law LLC, and Pennsylvania-based Kessler
Topaz Meltzer & Check LLP, while the latter and three other legal
firms — Pennsylvania-based Kaskela Law LLP and California-based Block
& Leviton LLP and Robbins LLP have issued statements encouraging
investors to join the suit.
Plug’s share price has almost halved this year,
from a high of $17.89 on 2 February to $9.26 at the time of
publication on Friday.
The company’s share price closed at $24.67 on 9 August 2022, the start
of the “class period”, and had fallen to $14.21 at the end of 1 March.
Back in 2000, soon after its stocks started trading on the Nasdaq
exchange, its share price reached an all-time high of $1,497.50.
Another class-action lawsuit was launched against Plug Power in
September 2022 by San Francisco-based legal firm, Schubert Jonckheer &
Kolbe, accusing Marsh and Middleton of making “false and misleading
statements to investors”. However, there has been no word on that
first lawsuit since it was announced.
Hydrogen Insight has approached Plug Power for comment.
Green Play Ammonia™, Yielder® NFuel Energy.
Spokane, Washington. 99212
www.exactrix.com
509 995 1879 cell, Pacific.
exactrix@exactrix.com
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